George Soros Making Big Bets on Gold

George Soros has joined fellow billionaire investors Stan Druckenmiller and Ray Dalios on investing big in gold. Precious metals expert Michael Ballanger explains what is behind these moves.

This week George Soros once again came out with his very large directional "bets" for the SP 500 and for gold and, needless to say, Mr. Soros is once again shorting the SP and buying gold and gold miners, joining Ray Dalio, Stanley Druckenmiller and Michael Ballanger (just kidding) in a decidedly unpopular stance. Carl Icahn came out in agreement during a CNBC interview this week that left the interviewer near-speechless and groveling in the mud of anti-Wall Street rhetoric.

In the meantime, some of the smartest investors I know are SOOOO bullish on gold that they are buying huge baskets of penny explorers under a nickel because of the leverage contained when the public finally decides to re-allocate to include gold (and mining stocks). A fund manager I know said to me, "Must be the top!" in reference to this, but it really can't be the top after a five-month rally representing the largest recorded quarterly advance in mining shares since recordkeeping began.

Look at the chart above and think what would happen if we were to get a shift from bonds to gold; 49% of global asset allocations reside in bonds while 1% reside in gold. Now, consider these two facts: Continue reading "George Soros Making Big Bets on Gold"

The Numbers Add Up to Vindication for a Cautious Gold Bull...

Precious metals expert Michael Ballanger discusses the importance of caution and timing in gold investment.

Back in early March, with the HUI screaming along north of 150, I published "Patiently Climbing Aboard the New Golden Bull," in which I opined that we had entered a brand-spanking-new bull market in precious metals and related equities. But I also noted that, with the Relative Strength Index (RSI) above 85 on the daily SPDR Gold Trust ETF (GLD) and approaching 80 on the daily NYSE.Arca Gold BUGS Index (HUI), the short-term outlook was less than appealing, while the intermediate and long-term outlook was unequivocally bullish for the first time in five long years. Continue reading "The Numbers Add Up to Vindication for a Cautious Gold Bull..."

Precious Metals Every Bit as Explosive as Secretariat at the Belmont Stakes

The charts tell the story, says precious metals expert Michael Ballanger, adding that the mining and metals market have the forward momentum of Secretariat as he clinched the Triple Crown.

Today's missive is going to be exceedingly "chart-infected," because many times a picture is worth one thousand words, especially in the case of the precious metals markets these days. I put on a 2% hedge prior to the FOMC meetings and the Wednesday press release and have since removed it, taking a small hit versus the mindboggling leap in my GDXJ position and associated advances in the juniors (KAM.V over $2). That's the beauty of a "hedge" versus a "short," and that is precisely what I have been thinking since the COT moved above 200,000 Commercial net shorts a few weeks back, with the gold and silver prices refusing to retrace.

One look at the chart below and you are immediately struck by the "shock and awe" campaign of "no corrections," where the market doesn't allow traders to buy back their favorite mining positions at prices representing only the meagerest of percentage pullbacks. In fact, after nearly 40 years of trading the miners, I have never ever seen a market with such awesome power behind it that is truly such a wonder to behold. The HUI has exploded out of the post-FOMC gate like Secretariat at the Belmont Stakes in 1973. (If you ever want to see an incredible feat by a horse, watch the Youtube clip of the race that clinched the first Triple Crown in 25 years AND was won by an incredible 25 lengths.) Just as that horse left the pack at the halfway point of the race, precious metals are massively outperforming the SP by a vast margin, and are forcing the money managers to be dragged into the market, teeth clenched and fingers clawing the ground. Continue reading "Precious Metals Every Bit as Explosive as Secretariat at the Belmont Stakes"

All Hail the Mighty Silver Bugs...

Precious metals expert Michael Ballanger examines silver's recent moves upward.


In my business, there is a great deal of travel, be it to properties in the Peruvian Andes or the Canadian Yukon or to the investment conferences in New Orleans or San Francisco or London, so I get a full psychographic cross section of every type of investor imaginable. First of all, the audiences I have encountered at the "Sound Money" conferences in Nassau or Bermuda are usually quite conservative and usually well-dressed and well-groomed. When the topic is gold and it is a controversial speaker looking for "the end of Western civilization," the audiences tend to be a tad different with hair length and dress code noticeably more avant-garde.

However, when the topic is confined to silver, while the speakers tend to be "evangelical," the audiences appear to be (operative word being "appear") simply stark-raving madmen of the first order. They usually dress in military fatigues, the males are all in ponytails, the women weigh more than the men, and the T-shirts and baseball caps on both males and females carry logos from either the WWF or the Monster Truck conventions. However, they are usually quite erudite when discussing "survival techniques"; they are usually extremely well educated and they are all able to rhyme off the silver production numbers for the past 20 years BY COUNTRY; and most importantly, they carry high distain for anyone who fails to know these facts. Continue reading "All Hail the Mighty Silver Bugs..."

The Gold-to-Silver Ratio: A Truly Generational Opportunity

Precious metals expert Michael Ballanger says that owning silver versus owning gold is a high-probability trade that could be the 2016 Trade of the Year.

Daily GDX Chart

This week's Gong Show in the global financial markets reminds me of the early 1980s before the advent of the Internet or online trading or blogs and especially before 30-something financial "advisors" were allowed to go on the national (and international) airwaves or Internet websites and babble on for what seem like days how "The Fed has our back!" as an excuse for buying stocks at 23 times forward earnings.

Back then, at 4:15 every Friday night, there would be a line-up of brokers and analysts (even the janitor) next to the old teletype machine (I am imagining more than a few raised eyebrows among the kids out there as they quickly Google search "teletype machine" on their Smartphones while sipping a $10 cup of fancy-ass coffee) in expectation of the all-important "Money Supply" numbers that everyone supposed was going to give them a hint as to when interest rates would start to decline from 16%-plus nosebleed levels of the early 1980s. Continue reading "The Gold-to-Silver Ratio: A Truly Generational Opportunity"